Toms Mathew is a Director at Spring Valley Group, a global agribusiness trader and pulses producer based in Dubai. Toms sat down with Jesse Sam in early March to talk about the company’s operations and his outlook on the pulses industry in the Middle East.
Hi Toms, could you tell us a bit about Spring Valley and the company’s history?
For me, Spring Valley’s history over the last 25 years is the history of the United Arab Emirates. As you know, the UAE is very dependent on food imports — the climate makes farming very difficult. We saw that as an opportunity: to bring in the best quality products from around the world at great prices, and offer our local customers a one-stop-shop for everything they might need. And that proved very successful.
But since then, we’ve been able to grow beyond that local vision. In 2013, Spring Valley was awarded ‘Re-exporter of the Year’ by Dubai Trade. That growth has coincided with Dubai’s emergence as a regional and global trading and logistics hub. We now supply countries across the GCC and even North Africa, with more than 5,000 TEUs of cargo through Jebel Ali every year.
And what do your operations look like today, particularly in terms of pulses?
Spring Valley has always been in the pulses business. We started off bringing a lot of chickpeas and lentils from India into the UAE. But it was an unreliable supply chain; we always faced bans from India, which obviously prioritises satisfying its own domestic demand.
In 2014, shortly after I joined the company, we decided to move into pulses processing. It’s higher value and the Emirates provided an excellent investment location. We started with a small unit in Umm Al Quwain which we’ve been able to grow over the last eight years.
How important are pulses to your business today?
They’ve become so important for us. We process around 100,000 tons of lentils, chana dal, and moong dal annually. Overall, I’d say pulses have grown from around 10% of our trade to nearly 50% over the last decade.
Our biggest pulses product is red split lentils. We source them from Australia and Canada, and then split them at our facility for the regional and global market.
We also see growing interest in yellow split peas and chana dal.
Over that 10 year period, what are the major trends that have shaped the region’s pulses sector?
Well, I can definitely say that we invested at the right time. Over the last 7-8 years, the UAE has become an important pulses hub. And that’s a story on both the supply and demand sides of the market.
We have become one of the most competitive suppliers globally because of the efficiency of our supply chain. If a buyer in Africa, Asia, or Europe needs processed pulses today, we are one of the first people they would approach. They know us to be reliable and competitive. An important part of that story is the world-class logistics we have developed in the UAE. It’s helped to foster a greater focus on efficiency, which I think has benefited a lot of sectors, not just agro-commodities.
What about on the demand side, what’s driving that growth?
Here, we see the same mega-trends that are influencing a lot of consumer food markets around the world. People are pursuing more health- and environmentally-conscious diets, which is leading to increased demand for pulses. That includes the standard products we’ve always sold, as well as a growing range of value-added items, like pulses flour or ready-to-eat goods.
We are really excited about Africa’s potential as an untapped market. It’s a young, rapidly growing population where food demand outstrips local supply capacity. We’ve seen demand from a number of countries — such as Ethiopia,Tanzania and South Africa— for our goods, so we’ve been focusing on fine-tuning our logistics to meet this demand.
How important is the Indian market for your business?
I like to describe India as the “elephant in the room” when it comes to the pulses market. It is an unavoidable factor: the largest producer and consumer on the planet. And it’s pretty close to us. So, whatever happens there inevitably affects us.
We do supply India. Our location is a strategic advantage. If there is unmet demand in the country, we can plug the gap in around a week, which is much faster than importing from Canada, Australia or further afield. So that is one strand of the relationship —sporadic unmet demand.
We also import a lot of pulses from India, and that’s something we’re really excited about within the upcoming India-UAE Free Trade Agreement. We’re still waiting for the details but we think it will be a very positive step for both countries, and for us.
You mentioned that red lentils are your most significant pulses product. Could you tell us what your outlook is for this market in 2022?
The red lentils market is an interesting one. In recent years, we’ve seen new demand from previously untapped markets, particularly in Africa. We’ve really tried to focus on ensuring the stability of our supply, so that we can respond to new opportunities. This year, for example, there have been container issues in Canada and Australia. So we focus on ensuring we have a robust, diversified supply chain.
What I like about red lentils is that it’s a product with broad appeal. It’s not specific to certain communities or geographies, like some pulses. So that really gives it great liquidity and growth potential.
You talked about creating a robust supply chain. Has the war in eastern Europe affected your business?
For us, the main impact is our yellow pea business. We used to import yellow peas from both Russia and Ukraine but obviously that is no longer possible. So we’ve been looking at replacements from Australia, Canada and Argentina. This situation has reinforced our commitment to developing a resilient supply-chain that can withstand such shocks. We are moving from a just-in-time supply chain model to a just-in-case model and that’s going to be the mantra for supply chains all over.
Interesting. Spring Valley also has a large retail division as part of its operations. Can you tell us more about that?
Yes, that’s another part of our business that has been really successful.
We are not actually retailers ourselves; instead, we provide packaged and labelled goods for retailers to stock on their shelves. It’s a logical progression for us given that we have the processing capacity and access to manufacturing and exporting logistics at Jebel Ali.
During the peak of the pandemic, when a lot of our supply routes were badly disrupted, the private label business was really important for us. And it remains strong.
Last but not least, we’re looking forward to having Spring Valley with us at Pulses 22. What are you most looking forward to?
We’re excited. It’s great to have things going back to normal here in Dubai, and we’re just very keen to meet our partners from around the world. It’s been nearly three years since the last conference and we’re keen to see people again.
Three years is a long time! There are so many people we’ve started working with since the pandemic but we haven’t got a chance to meet in person, so this will be a great opportunity. There are so many things to talk about: supply chains, the future of shipping, and brainstorming new ideas for our important industry. I’m really looking forward to it.
That’s very encouraging. Well thanks for your time Toms, we’ll see you at the conference.